solar quote question - estimated return on investment timescale.

[Gary K]

Yes, I saw a 4 year payback & couldn't get my pen out fast enough!

I don't think there has EVER been such a short payback on PV,I thinks 7-8 years is/was about right.
If that's what the salesman quoted, I would like to see his figures
You should have a written quote with certain figures like fit returns and electricity saving along side the full cost of the system that he has used to come to the break even time.

 

[solarsavings]

jouleflow, look at this one first and then here

 

[plugsandsparks]

I think you are mis-understanding how investments work. Loss of interest in the bank is never a factor in these calculations. What you are mixing up is "investment comparisons".
Whether you spend money to buy a classic car, pension, house, commercial property (which are all investments), if you have used your own money then you do your ROI comparisons as you could have done lots of different investments rather than solar panels. If you borrow the money , of course you will include the interest charged as this would be the same for any of your investment choices.
Hope this helps

 

[Octopus]

But: it hasn't achieved anywhere near the returns forecast, even with this hot Summer & mild Winter.

out of interest how much has your electricity bill dropped by (per year) and how much have you received from your FIT rate (per year)?

 

[jouleflow]

jouleflow, look at this one first and then here

Thanks, I'll have a read through today.

 

[jouleflow]

I think you are mis-understanding how investments work. Loss of interest in the bank is never a factor in these calculations. What you are mixing up is "investment comparisons".
Whether you spend money to buy a classic car, pension, house, commercial property (which are all investments), if you have used your own money then you do your ROI comparisons as you could have done lots of different investments rather than solar panels. If you borrow the money , of course you will include the interest charged as this would be the same for any of your investment choices.
Hope this helps

Thanks, I just wanted to compare apples with apples. So in my opinion I was being sold the benefits of paying for the installation against keeping the money. It's only these two figures that reflect the true cost of going ahead with the proposal offered by the salesman. For example, if the salesman was also offering finance to use to cover the cost then these interest figures would have been included.

 

[Octopus]

Thanks, I just wanted to compare apples with apples. So in my opinion I was being sold the benefits of paying for the installation against keeping the money. It's only these two figures that reflect the true cost of going ahead with the proposal offered by the salesman. For example, if the salesman was also offering finance to use to cover the cost then these interest figures would have been included.

My suspicious nose sniffs out somebody who wants to complain about miss selling....

 

[jouleflow]

out of interest how much has your electricity bill dropped by (per year) and how much have you received from your FIT rate (per year)?

I've had 3 fit payments = £538 so roughly will be £717 for the year.
The monthly direct debit reduced from £343 to £222 ( some of which was for changing tariff ). = £1452 for the year. So total savings £2169.
Incidentally the cost was £17k & the interest I was receiving = £814 pa net compounded.
Excluding the interest lost, the roi is just less than 8 years at current rates.
Including the loss of interest roi is 12.5 years.
These are approximate figures & do not take price rises & compound interest into account.

 

[Baddegg]

I stand by my previous statement joule how any one got you to sign up is beyond me,I pity the poor sod who has to deal with you going forward! Ha ha,but I do wish you the best of luck

 

[solarsavings]

jouleflow, what size system do you have.

 

[Octopus]

with a ROI of about 8 years that sounds OK to me

You can't include interest "lost" ............... and how did you get a return of about 5% - that's rather high!

 

[jouleflow]

jouleflow, what size system do you have.

15kW capped to 4kW max export.

 

[jouleflow]

jouleflow, what size system do you have.

15kW capped to 4kW max export.

I don't think there has EVER been such a short payback on PV,I thinks 7-8 years is/was about right.
If that's what the salesman quoted, I would like to see his figures
You should have a written quote with certain figures like fit returns and electricity saving along side the full cost of the system that he has used to come to the break even time.

Thanks Gary K.
I can't publish the quote, but the figures are:
15kW system £17 000
Annual yield 13837 kWh
Average annual roi 29.49%
Year 1
fit - £570.09
export - £339.70
savings - £2037.50
Full payback in year 4.

 

[Gary K]

How does he calculate savings of £2037?
If you managed to offset the whole of the systems output from the cost of your electricity it barely comes to that?
13837 x 15 pence =£2075

I have used 15p as the cost of a unit.
Unless you are living in a mansion with a swimming pool or using an electric pottery kiln, I would be surprised if you use that much leccy! Obviously when you are using most of your electricity in the evening the sun is not shining.
But then again if you have a roof large enough for that, then you may live in a mansion!

 

[plugsandsparks]

I get 3.3% for any of my savings which offset the mortgage interest rate. The house can be viewed as an investment where i have borrowed the money so any ROI on my house has to included all the interest i have paid as well as the capital. You appear to have reduced your savings to buy solar, by reducing your savings you have higher mortgage interest to pay, so in simple terms solar had to outperform your mortgage interest, otherwise whats the point. This is nothing to do with a solar company though, this is your own personal investment planning.

 

[Gary K]

15kW capped to 4kW max export.

Thanks Gary K.
I can't publish the quote, but the figures are:
15kW system £17 000
Annual yield 13837 kWh
Average annual roi 29.49%
Year 1
fit - £570.09
export - £339.70
savings - £2037.50
Full payback in year 4.

Someone's maths seems to be a little off!
570.09+339.70+2037.50=2947.29
2947.29 x 4= £11789.16
or am I missing something?

 

[jouleflow]

I get 3.3% for any of my savings which offset the mortgage interest rate. The house can be viewed as an investment where i have borrowed the money so any ROI on my house has to included all the interest i have paid as well as the capital. You appear to have reduced your savings to buy solar, by reducing your savings you have higher mortgage interest to pay, so in simple terms solar had to outperform your mortgage interest, otherwise whats the point. This is nothing to do with a solar company though, this is your own personal investment planning.

Our money came from our offset mortgage account that holds our pension lump sum so it wasn't borrowed but does attract the exact rate as our mortgage.

I understand that regardless of where the money comes from, if you keep it then you can get interest on it. If you spend it then you lose that income. If you borrow it then there is a cost involved. The company who sell the installation don't mind where it comes from & that is fine. All I believe is that there are two possibilities - keep it or spend it & I am just comparing the bottom line of each choice.
Keep it and gain interest but pay for all electricity.
v/s
Spend it and lose interest but get reduced electricity bills.
That is how I compare two investments - the difference in the money gained / lost.
It is up to the individual how they look at comparing the two options, I choose to compare the bottom lines of each. If people see it how I do, then they can make their own decision, it is just another factor to consider.

 

[Octopus]

^^ clutching and straws spring to mind

 

[jouleflow]

Someone's maths seems to be a little off!
570.09+339.70+2037.50=2947.29
2947.29 x 4= £11789.16
or am I missing something?

Don't I know it, as they say always read the small print, no such thing as a free lunch etc..

 

[jouleflow]

with a ROI of about 8 years that sounds OK to me

You can't include interest "lost" ............... and how did you get a return of about 5% - that's rather high!

But I was quoted 4 years lol.